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Big finance urged to go hi tech

NAIROBI, Kenya, Jun 4 – President Mwai Kibaki has urged stakeholders in the microfinance industry have been urged to employ technological innovations and user friendly tools that can ensure easier access to financial services for customers.

Speaking on Thursday, he said these institutions should consider using technologies such as the popular mobile banking concept so as to financially empower poor and disadvantaged people in Africa.

“I urge you to continue seeking low cost methods of delivering value added services to all your clients. In your pursuit of growth, I appeal to you to not only consider the financial returns, but also the social returns you make to your communities,” he told a ‘Women in Banking and Microfinance in Africa’ conference.

He pointed out such measures would not only enhance the continent’s microfinance institutions efficiency and effectiveness but they would go a long way in reducing costs and increasing their outreach.

While observing that only one in five households in Africa has access to formal financial service, the President called upon the Micro Finance Institutions (MFIs) to extend their services to all as one way of creating employment in Africa.

“While microfinance may not alone solve the entire problem of poverty, it is an important tool in the mission of poverty eradication on our continent,” he said. But in the same breath he regretted that operating and financial expenses among African Microfinance institutions were high.

He suggested players to work together and find sustainable and affordable sources of financing that can be advanced to the majority on the continent.

Also present at the conference was the Royal Highness of the Grand Duchess of Luxembourg Maria Teresa who urged the microfinance sector to consider employing more women in high level positions to ensure its success.

She pointed to research which shows that the impact of microfinance on women, who account for 85 percent of the poorest clients served by microfinance, can lead to the reduction of extreme poverty and hunger in Africa and therefore lead to the attainment of the Millennium Development Goals (MDGs).

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“Equality in treatment is key to achieving the target of bringing down to half poverty and hunger in the world by 2015,” she argued on the need to have more women in senior management roles.

However, for these goals to be reached, Mrs Teresa emphasised the need to have adequate institutional, financial and political measures.

“We see that the distance between the rich and the poor still continues to grow. To promote a real culture of peace and a genuine respect for human dignity, we must dramatically change our mindset,” she added.

Despite these challenges however, she underscored the importance and potential that exist in Africa and added that the continent must find solutions to its own problems.

“I believe deeply that any form of Afro-pessimism is unacceptable. As Federico Mayor likes to put it: ‘Africa is not the problem. It is the solution!’ This conference is a vivid testimony of that conviction,” she said of the one day conference.

The meeting discussed a ‘Diagnostic Report’ on Microfinance in Africa and identified a common vision to expand access to financial products and services to millions of poor Africans.

The report gives 26 recommendations for these institutions, governments, donors and regional and global networks.

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